The Business Side 
of Farming 



Farm Records 



J. A. BEXEUL 




Class 
Book. 



Sfcj 



Br 



Copyright N°_ 



COPYKIGHT DEPOSIT. 



li 



THE 

BUSINESS SIDE OE FARMING 



PART I 
FARM RECORDS 



A TEXT-BOOK FOR STUDENTS IN AGRICULTURE 
AND A MANUAL FOR HOME-STUDY 

BY 

J. A. BEXELL, A. M. 

DEAN SCHOOL OF COMMERCE 
OREGON AGRICULTURAL COLLEGE 



Oregon Agricultural College Press 

Corvallis, Oregon 

1909 









Copyright 1909 
By J. A. Bexkix 



2 4.N 



Ruled Blank Books 

with printed headings for use in writing out the exercises, or for 
practical use on the farm, may be obtained from the College Book- 
store, Corvallis, Oregon. Paper, 60c; Cloth, $1.10. 



CONTEXTS 

PART I 

CHAPTER PAGE 

I. Introductory 7 

II. Objects and Methods of Bookkeeping 9 

III. Single Entry Farm Accounts 11 

IV. Double Entry Farm Accounts 21 

V. Household Accounts 30 

VI. The Balance Sheet and Statement 35 

VII. Cost of Production 40 

VIII. Special Records 44 

IX. Practice Work in Single Entry 50 

X. Practice Work in Double Entry 55 

XI. Practice Work in Double Entry (Cont'd) ..61 

XII. Original Exercises and Review 64 



FOREWORD. 

This manual has been prepared as a text for students in the 
Business Side of Farming, and is Part I of a work on that 
subject now in preparation. The complete volume will em- 
brace: Farm Records, Rural Law, and Rural Economics. 

There are a number of works on Farm Management now on 
the market, but I have found none adapted to the class room. 
This is especially true of works on Farm Records. An arith- 
metic would be useless as a text without problems for solution; 
a text on Farm Records is likewise useless in the class room 
without exercises for practice. 

The aim has been to make the exercises as practical and 
simple as possible, but no attempt has been made to limit the 
illustrations to actual experience on any particular farm. 
Hence, both prices and results will probably vary considerably 
from actual practice, a fact which will not reduce their illus- 
trative value. The forms suggested contain many new and 
labor-saving teatures, conforming with the best modern busi- 
ness practice. A resourceful teacher will be able to supple- 
ment the exercises to any extent to suit the time available 
and the needs of his class. 

The increasing interest shown in this subject warrants the 
belief that it will be introduced into the public schools in the 
near future, and surely there is no subject more worthy of 
attention or more sadly neglected. Suggestions and criticisms 
from farmers and teachers interested in the subject will re- 
ceive careful consideration in a future edition. 

A complete outfit of the blanks suggested can be obtained 
from the publisher for $1.10 postpaid. 

Oregon Agricultural College T a t>_, v „ t t 

October 1, 1909 J . A . tfEXELL 



PART I. FARM RECORDS. 



CHAPTER I. 

INTRODUCTORY. 

It is a truism to say that the financial side of farming is 
of the utmost importance. But the fact remains that this side 
of the world's greatest industry is almost entirely neglected 
by both the farmer and the schools. Professor Bailey says on 
this subject : "In visiting practically every farm in one of 
the counties of the state (N. Y.) we did not find one man who 
knew how much it cost him to produce milk or to raise any 
of his crops." 

Prosperity of the Farmer. 

The Secretary of Agriculture, in recent Year Books, points 
out the remarkable prosperity of the farmer; that the export 
of farm products is vastly in excess of all other exports com- 
bined; that a million agricultural debtors have been trans- 
formed during the last ten years into the same number of 
surplus depositors; that "contrary to his reputation, the far- 
mer is a great organizer, and he has achieved remarkable and 
enormous successes in many lines of economic co-operation 
in which the people of other occupations have either made 
no beginning at all or have nearly if not completely failed." 
He points out that most farmers live better than the average 
merchant or mechanic. 

Causes of Success. 

It is doubtless true that the farmer is becoming a factor 
to be reckoned with in the business world; that the average 
farmer knows vastly more about scientific farming than his 
father did ; he understands more thoroughly the value of 
proper cultivation, of fertilization, of rotation of crops, and 
of diversified farming; but it cannot be said that he owes 
his success to improved business methods. He has been suc- 
cessful, rather in spite of his ignorance in this respect, and 
because of the lavish generosity of mother nature, 

(7) 



8 THE BUSINESS SIDE OF FARMING 

Two Phases <>f Farming. 

The business of farming assumes two distinct phases : the 
productive phase and the exchange phase. The one aims to 
extract the treasures from the soil; the other, to place them 
in the hands of the consumer. It is important not only to raise 
abundant crops, but also to sell the products to advantage. 

Importance of tin- Exchange Phase. 

The importance of the exchange phase is often lost sight of. 
A farm may be forced to yield to its maximum capacity, labor 
may be managed properly and waste reduced to a minimum; 
and yet the net result may be a loss at the end of the year. 
As a general economic proposition, it might be said that large 
crops often result in serious loss to society as a whole. If the 
net value to the consumer is less than the labor and capital 
expended on the crop, society is the loser by the difference. 
Hence the importance of a thorough understanding by the 
farmer as well as by the merchant and manufacturer of the 
laws and methods of exchange or commerce. 

Farming a Paying Business. 

That farming is a science has been emphasized so much that 
the fact that it is also a business is often lost sight of. It is 
a real business, and one which pays the United States close to 
eight billion dollars annually. It has been demonstrated re- 
peatedly that no legitimate business pays better than farming. 
It may be a little more up-hill work at the start, since most 
farmers begin business with small capital, but it is incompar- 
ably safer in the long run, and will insure a competence for old 
age with greater certainty than any other occupation. But let 
it ever be borne in mind that the condition for success is that 
farming must be conducted on business principles. 



CHAPTER II. 

OBJECTS AND METHODS OF BOOKKEEPING. 

Accurate records and accounts are absolutely necessary in 
the management of every business enterprise, great or small. 
No business can be successful in the long run unless its con- 
dition can be determined at any time, and no conservative 
business man will fail to prepare a financial statement at the 
end of his fiscal year. He must determine how he stands, not 
only with others, but with himself. 

Objects of Keeping' Accounts. 

One object of keeping accounts is to assist in accumulating 
property. Another important object is to record a continuous 
history of business transactions for future guidance. Not 
only is this profitable, but it is a source of real pleasure and 
satisfaction to know our standing with those with whom we 
deal as well as the profits and losses in our business enter- 
prises. 

What the Records' Should Show. 

A complete system of farm records should enable the farmer 
to tell at any time how his business stands with himself and 
others; the cost of production of staple crops and live stock, 
and the periodical results of both the productive and the ex- 
change phase of his operations. The records should also show 
personal and household expenses, and finally a comprehensive 
history of the various phases of the enterprise, including plats 
of crop rotation, fertilizing, etc. 

Difficulties of Farm Bookkeeping. 

Numerous systems of farm bookkeeping have been proposed, 
but the trouble with them all is that they are either too com- 
plicated or altogether unpractical. Professor Bailey says: 
''The entire subject of farm accounting must be attacked in 
a new way. The ordinary bookkeeping will not apply." The 
reason is obvious. Farming is a much more complicated busi- 
ness than most people suppose. A farmer is both a producer 
and a dealer. He needs financial records as complete as the 
average merchant and cost records as accurate as the manu- 
facturer. But the records must be adapted to the business in 
hand. "The ordinary bookkeeping will not apply." The far- 
mer is usually a very busy man. His chief difficulty is neither 
ignorance nor indolence. He has little time for fancy book- 
Co) 



10 THE BUSINESS SIDE OF FARMING 

keeping and still less for "red tape." What he wants is a 
plain, simple, straightforward history of his business; so ar- 
ranged and classified as to require the minimum effort to keep 
it up. It may be interesting for his children to learn the con- 
ventional use of red ink, rulings, closing of books, the intrica- 
cies of journalizing, etc., but all this is not necessary to a 
keeping whereby the yearly profit or loss may be determined 
by a proper understanding of farm bookkeeping. . 

Methods of Bookkeeping. 

In the following pages I suggest two methods of farm book- 
keeping whereby the yearly profit or loss may be determined 
and compared from year to year. The first is extremely simple 
Single Entry, while the second method is a comprehensive, but 
very simple Double Entry, by which the financial standing, the 
cost of production, profits and losses, etc., can be ascertained at 
any time. Any farmer with average intelligence will be able 
to master it with small expenditure of time and labor. 



CHAPTER 111. 

SINGLE ENTRY. 

The Day Book. 

The most important record in this method of bookkeeping 
is the Day Book, or what might properly be called the History 
of the Farm. This should be written in the form of a diary, 
without attempting a close classification of the entries. Al- 
ways bear in mind, however, that it is safer to give too much 
rather than too little information in the records. The Day 
Book should contain any memoranda which might prove valu- 
able for future reference. Conditions of the weather, time of 
planting, breeding, division of fields, sales, purchases, loans, 
attendance at conventions, valuable recipes, etc., are proper 
subjects for entry. Though it is advisable to keep the book as 
neat as possible, it is unnecessary to spend much time for that 
purpose. It is more convenient to jot down items in lead pen- 
cil as they come along, and then, as time allows, classify them 
under their respective heads. 

The Day Book and Cash Book Combined. 

In the form below, the Day Book and Cash Book are com- 
bined. The ruling is that of an ordinary stock Day Book. In 
the left-hand column is entered all sums received and in the 
right-hand column all payments. 

While the combined Day Book and Cash Book has the advan- 
tage of extreme simplicity, it is often more satisfactory to de- 
vote a part of the Day Book, or a separate book, exclusively 
to cash transactions. Where this plan is followed, it is un- 
necessary to record all the Cash items in the Day Book. The 
left-hand page is used for cash receipts and the opposite page 
for payments. 

Bill and Receipt Pile. 

A very important part of the farm records is the Bill and 
Receipt File. A part of the Day Book can be devoted to that 
purpose, but it is better to provide a separate .book. In it 
should be securely pasted all bills for machinery, implements, 
tools,, livestock, nursery stock, furniture, etc., which will be 
subject to inventory, but not bills for supplies, feed, table ex- 
penses, etc. ; also receipts for the payment of money, cancelled 
notes, certificates of pedigree, important clippings from peri- 
odicals, and any other matter of interest. This will prove an 
invaluable • record for future guidance. 

(ii) 



L2 



THE BUSINESS SIDE OF FARMING 












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14 THE BUSINESS SIDE OF FARMING 

Tho Inventory. 

The inventory may be considered the most important doc- 
ument among the farm records, because without it no results 
a all can be obtained. It should be taken at such a time as 
will give the most accurate results with the least expenditure 
of labor. This differs widely in different localities. January 
1st seems the most natural beginning of the fiscal year, but 
the objection is that at this time there is apt to be a large quan- 
tity of feed and supplies on hand. 

April 1st would be a better date so far as the stock on hand 
is concerned, but inconvenient in many localities on account of 
the pressure of spring work. Whenever it is taken, it should 
be accurate. No guess work should be tolerated. Weigh 
and count; do not estimate. Then assign the actual market 
value to the property, taking due account of depreciation. 

Depreciation. 

Neither an old wagon nor an old horse is worth as much as 
new ones. The same holds true with very few exceptions of 
all equipment, animals, houses, and improvements. The ques- 
tion as to what rate shall be charged off annually, so as to 
create a sinking fund with which to renew the depletion, has 
been an open question with accountants since time immemorial. 
It is particularly difficult to determine the depreciation of 
live stock, work horses, and depletion of the fertility of the 
soil. Without entering into a discussion of the subject, I 
give below the experience and opinion of the best authorities 
on the subject. The thoughtful farmer will find no difficulty 
in adjusting these rates to suit his conditions. For the purpose 
of general estimates, the following rates on the cost or market 
value are fairly accurate: 

Buildings (including insurance and repairs). 5 per cent. 

Horses, above 5 years 10 per cent. 

Milch cows 8 per cent. 

Machinery and tools 10 per cent. 

Depletion of land on account of continued 

cropping after fifth crop 2 per cent. 

How to Determine the Profits. 

The all-important question at the end of each year is : Has 
the work for the year been a financial success or failure? To 
determine the profits or losses is, therefore, a problem to be 
solved each year. As a matter of fact, it is a very simple prob- 
lem, and it becomes easier the oftener it is done. 

Let us assume that heretofore you have kept no books what- 
ever, but you have now decided to make a start. You have pro- 
cured a simple, substantial Day Book (may be purchased at any 



FARM RECORDS 



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OPENING ENTRY AND INVENTORY 



16 NIK IM'SINESS SIDE OF FARMING 

stationery or drug store), and after listing all your property, 
you arc prepared to make the entries shown in the illustration. 
April 1st is selected as the beginning of the fiscal year, because 
on that date the supplies, grain, feed, etc., are usually low, and 
the average farmer has considerable time to spare. Of 
course, this varies in different localities, and any other date 
may be adopted to suit the farmer's convenience. The proper 
opening entries, including the inventory, are as follows: 

A ITear Later. 

A year has passed and we are now ready to determine the 
r suit of the year's work. Since we have kept the only mem- 
oranda in the day book, the best we can do is to take another 
inventory exactly similar to the last one. This we will now 
proceed to do. 

Tne second financial statement and the statement of Profit 
and Loss are illustrated on page 17. 






FARM RECORDS 



17 



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SECOND FINANCIAL STATEMENT 



18 



THE BUSINESS SIDE OF IWUMING 



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20 



THE BUSINESS SIDE OF FARMING 



Continued Inventories. 



It is often convenient to tabulate the annual inventories as follows: 



ITKMS 



April 1 April 1 

[909 






Fai in 160 acres (raai k< t value) 
Product 

Stock 

Poultry 

Life Insurance 

Cash 



Total 



8000 

.",117 
1959 



964 
170 



6620 
547 

1966 
100 



126 



Personal Accounts. 



A farmer frequently retails his products to his neighbors or 
to townspeople, if he lives near town. In such cases it often 
happens that he can sell to better advantage by running an ac- 
count with steady customers, collecting by the week or month. 
If this phase of the business is extensive, as is the case in truck 
farming, dairy, poultry, and the like, it would pay the farmer to 
provide tickets or coupons and sell five or ten dollars' worth 
in advance even at a small d'scount. But generally an account 
with each customer, kept either in a separate book or in part of 
the Day Book, will be found satisfactory. However, most far- 
mers sell their products for cash, or exchange for merchan- 
dise, which is equivalent to cash sales. It is, therefore, un- 
necessary to enter into an elaborate discussion of keeping 
such accounts. 

Some farmers, very unwisely, attend to the personal busi- 
ness of their hired help, even to the extent of buying their 
smoking tobacco. There is absolutely no excuse for such a 
practice. Rather pay your help in installments and let them 
settle their own bills. 

Accounts with persons we owe are generally unnecessary. 
Most merchants furnish either a pass book in which the ac- 
count is shown in detail, or an itemized bill is furnished with 
each purchase. These bills should be pasted in the Bill File 
and checked off when paid. In the great majority of cases 
this will prove more satisfactory than ledger accounts. 

A special ledger can be provided, or separate pages of the 
Day Book devoted to special accounts. This classification is 
made either daily, weekly or monthly, as time and circum- 
stances allow. 



CHAPTER IV 



DOUBLE ENTRY. 



Ancient Methods. 



Not many generations ago it was considered sufficient for the 
average manufacturer merely to record his cash receipts and 
expenditures and to keep a tolerable accurate check on the cash 
balance. In many instances, the left trouser pocket served as 
the debit side and the right as the credit side of the "Ledger." 
Modern business methods and sharp competition nave changed 
these notions until today it is necessary to know the cost of 
production in advance to the smallest detail. Ancient business 
methods prevail yet, very generally, on the farm. The won- 
derful progress of the American farmer is due to marvelous 
natural resources, labor-saving inventions, and natural inge- 
nuity, rather than to wise and prudent management. 

Necessity of Careful Management. 

In certain respects, a farmer must combine the methods of 
the manufacturer and the merchant. He must learn not only 
how to increase production but also how to facilitate the profit- 
able exchange of his products. He must reduce the cost of pro- 
duction to the minimum by increasing the quality and the 
quantity of his products, and by getting full value out of labor. 
He must manage so that his working force, farm hands, chil- 
dren, horses, all, are constantly employed. This requires most 
skillful management in the rotation of crops, in the division 
of labor, in selecting sseds, fertil ; zers and stock ; and, above all, 
it requires general prudence in purchasing equipment and sup- 
plies, and in marketing products. This class of farmers re- 
quire a variety of records to assist in the proper management 
of their business. A first-class set of books is just as indis- 
pensable to them as to the banker or to the manufacturer. 

Superiority of Double Entry. 

A careful comparison of the results obtained in the last 
chapter with the balance sheet given below will convince the 
reader of the superiority of double entry. It will be ob- 
served that the only result obtained by a comparison of inven- 
tories was the net profit or loss. The source or causes of these 
results cannot be obtained by this method. The method sug- 
gested in Chapter III has this advantage : There is not a 
farmer so busy or so ignorant that he cannot adopt it and 

(21) 



22 



THE BUSINESS SIDE OF KAllMING 







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CASH BOOK 



24 THE BUSINESS SIDE OF FARMING 

(1, rive greal benefil from its use. But the ambitious, progres- 
sive farmer will not be satisfied with this primitive method 
any more than a wide-awake merchant will be satisfied with 
single entry bookkeeping. He will adopt a system which will 
give him at any time reliable information as to his financial 
standing, cosl of production of crops, live stock and poultry, 
household expenses, etc., and by which he can prove that his 
work is correct. 

Single and Double Entry Compared. 

The distinction between single and double entry is unimpor- 
tant for our present purpose, but it may be a satisfaction to 
the student to know that the method we are now to consider 
is double entry. The important distinction between the two 
methods is that in double entry, accounts are kept with per- 
sons, property, and allowances, while in single entry, accounts 
are kept with persons only. In double entry there is a corre- 
sponding debit for every credit; the total debits and credits 
must therefore be equal, and must balance at any time. This 
becomes clear by referring to the Cash Book below. In the 
first entry, the amount is entered in both the Total and in the 
Sundries column; and the same is true of all the succeeding 
entries. Hence the sum of columns four to ten inclusive must 
equal the total in column three. You will find the same to be 
true of the Payments, and of the Household Accounts. 
Additional Books Needed. 

Very important books in double as well as in single entry 
are the Day Book and the Bill File. They are to be kept in 
exactly the same way as suggested under single entry, except 
that no cash entries are recorded in the Day Book. The im- 
portant consideration now is to adopt additional records that 
will furnish the necessary information in systematic and tabu- 
lar form, and requiring the minimum amount of labor. 

Tin- Cash Hook. 

The Cash Book is the basis of classification. A very con- 
venient form is given below. The special columns take the 
place of a ledger. All money columns except the total column 
will be referred to as Distribution Columns. They are in 
reality separate accounts, and this form might, therefore, 
properly be called a combined Ledger and Cash Book. The 
form suggested has the important advantage of being self- 
balancing. A trial balance can be taken at the end of each 
page, month or year, as illustrated on page 34. The process 
of preparing a financial statement becomes extremely simple 
by this method. A few observations regarding equipment and 
supplies, improvement and repairs will be of assistance in using 
the distribution columns. 



FARM RECORDS 25 

Equipment and Supplies. 

In accurate accounting, the question often arises : What 
shall be considered equipment, and what supplies? Supplies 
are defined as expendible or consumable materials, which are 
incapable of being used more than once; while equipment is 
of more permanent character, articles which can be used re- 
peatedly. Fuel, lubricating oil, cotton waste, feed, etc., are 
supplies, while machinery, furniture, and apparatus of all 
kinds are equipment. 

Improvement and Repairs. 

The distinction between improvements and reuair* is not 
always clearly understood. An improvement adds value to 
the property, in the shape of equipment, buildings, drains, 
fences, and the like, while repairs merely keep up the property. 
A coat of paint on an unpainted building is an improvement; 
repainting is classed under repairs. This distinction is very 
important in making an inventory. Improvements are added 
to the inventory, repairs are not. 

Cash Balance and Sundry Columns. 

The cash balance is found as follow: - .. 

Total receipts $653.14 

Total payments 578.80 

Balance $ 74.34 

Note that the totals of columns four to ten equal the total 
of column three ; and that columns fifteen to twenty-two equal 
column fourteen. The Sundries column contain all entries 
which do not fail under the special columns. At the end of 
the year the items are segregated under various titles. The 
segregation for the month of April is a follows : 
Sundry Receipt Column (10) : 

Balance $126.04 

Labor 10.00 

Wood 22.40 

Total $158.44 

Sundry Payment Column (22) : 

Interest $ 22.00 

Taxes 33.40 

Accounts Pay 15.80 

Insurance 35.10 

Total .$106.30 

Improvements and Repair Column (21) : 

improvements $ 80.00 

Repairs 34.60 

Total ....$114.60 



26 THE BUSINESS SIDE OF FARMING 

Trial Balance. 

In the language of the accountant, a trial balance is a test of 
the equality of the debits and credits in a set of double entry 
books. Our trial balance is much simpler ; it is simply a test 
of equality of the total columns and the distribution columns, 
I-i the Cash Book, merely add the distribution columns on each 
side and note that their sum equals the respective total col- 
umns. The Household and Shop accounts are balanced in the 
same manner. 

The IJank Account. 

The "Banking Habit' carries with it many advantages. Im- 
portant among them am: 

1. The depositor's credit and influence is measured largely 
by the size and regularity of his bank account. 

2. A tendency to economize by a desire to increase the bank 
balance. 

3. The banker becomes your bookkeeper and business coun- 
selor. 

4. Security against fire and robbers. 

5. Endorsed checks are both records and receipts of pay- 
ments. 

6. A benefit to the community by keeping the money in cir- 
culation. 

The practice of banking is as follows: Record the check 
numbers, as indicated in column thirteen. The checks are 
satisfactory receipts, but the itemized bills should be pasted 
in the Bill File and bear the same number as the checks. The 
bunk will usually furnish all necessary stationery free of 
ciarge. The bank balance is considered a part of the cash on 
hand so that no special account except the check stubs and pass- 
book, need be kept with the bank. The bank balance is proved 
each month as follows : Arrang3 the checks returned numeri- 
cally. List the checks not returned; add the outstanding 
checks to the balance shown in your check register or on your 
pass-book. It is often convenient to keep a special check reg- 
ister. Following is a convenient form, showing the method of 
proving the balance at the bottom of the page. 

The Ledger. 

With a special column cash book, the ledger can he dis- 
pensed with in most cases. The further classification of the 
sundry columns can be done at the end of the year, as illus- 
t rated on page 25, and a few pages of the Day Book can be de- 
voted to "What We Owe Others'" and "What Others Owe Us." 
Where a special ledger is found necessary, the form shown 
below can be used. 



FARM RECORDS 



27 



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kecks jLnf. 




BANK ACCOUNT 



28 THE BUSINESS SIDE OP FARMING 

The old style ledger possesses some advantages over any other 
form. The debit appears on the left and the credit on the right 
side on the same page. It is used either in double or single 
v. The difficulty of keeping the ledger in balance prevents 
the use of the double entry ledger to a very large extent. This 
is especially true if an attempt is made to use the ordinary 
Journal. 

Direct entries into either the double or single entry ledger 
presenl less difficulties, and the method is recommended where 
the classification of accounts is such as to make the combined 
(ash Book and Ledger unpractical. This need scarcely ever 
be the case, however, because if ruled sheets cannot be obtained 
without headings, a blank sheet may be ruled with any number 
of columns and headed with titles to suit. For example, an 
orchardist would head his Receipt Columns: Apples, Prunes, 
Peaches, Small Fruits, etc. While an exclusive stock farmer 
would devote special columns to the different kinds of stock. 

The advantage of the ledger method is that each account is 
more condensed, while the self-proving and labor-saving feat- 
ures are important in the Special Column Cash Book. Prepar- 
ing a trial balance and balance sheet, and closing the ledger 
properly, though very simple for the experienced accountant, 
requires a proficiency in bookkeeping few farmers possess. 

Below is an illustration of the ordinary form of direct-entry 
ledger, showing the entries for April 1st. Compare these with 
the first entries on page 22, and note the similarity of results. 
In the form below, follow 7 the arrows and note that there is a 
debit for every credit, and vice versa. In the column marked 
(a) is entered the Day Book page, if the entries have been pre- 
viously made in that book. 



FARM RECORDS 



29 




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DOUBLE ENTRY LEDGER 



CHAPTKIt V. 



HOUSEHOLD ACCOUNTS. 

It will be seen that no provision has been made in the Gen- 
eral Cash Book for separate items in the household accounts. 
This is left for the housekeeper. The fact that her field is 
somewhat limited from a business point of view is no argu- 
ment in favor of loose and careless methods of accounting. 

Most housekeepers prefer to receive a fixed allowance for 
household expenses, whenever it is practicable. For our pres- 
ent purpose we will suppose that the following agreement has 
been entered into between the farmer and his wife. She is 
to receive the following: 

Monthly Allowances for Household and Personal Expenses. 

For proprietor and wife $25.00 

Board for hired help 15.00 

For four children 32.00 

Sundries 18.00 






$90.00 

In addition to the cash allowance, vegetables, poultry and 
dairy products are furnished from the farm at market price. 
The proprietor gives his wife an allowance of $90 each month 
either in one or in several payments, and enters it in his cash 
expenditures. His wife, in turn, enters her allowance in her 
record. Bills for furniture, clothing, and utensils are pasted in 
a Bill and Receipt File, same as in the Farm Accounts. 

Note that the items entered in columns one or two are also 
entered in columns eight, nine, or ten, since they are purchases 
from the farm. Because they are entered both as receipts and 
payments, they do not affect the cash balance. 

At the end of the year, the proprietor enters the totals of 
columns one and two in his cash receipts under the proper 
headings, and at the same time they are entered as cash pay- 
ments in the household column. See page 22, mder April 30th. 
Thus, the farm will receive full credit for what it sells to the 
household as well as to others. 

It is suggested that the housekeeper open a private bank 
account and pay large items by check. See April 13th, 29th 
and 30th. There are numerous advantages in keeping a bank 
account. See page 26. A hill for furniture, utensils, and im- 
provements should always be taken and pasted in the Bill File. 
It is convenient to number the bills the same as the checks, as 

(30) 



FARM RECORDS 31 

luggested in column six. Since endorsement by the payee 
constitutes receipt, it is generally unnecessary to take receipt 
vhen payment is made by check. 

Page 30 shows a convenient form of a combined household 
]ash Book and Ledger. A summary of the receipts and pay- 
nents is prepared at the end of the year, as shown on page 33. 

Trial Balance. 

Groceries $ 13.05 

■leat '. 11.80 

iairy and Poultry 12.40 

Nothing 16.85 

furniture and Utensils 22.05 

lelp and Laundry 11.60 

jibrary 6.65 

,ight and Fuel 6.10 

lifts 2 35 

■"ersonal 1.25 

Pjavel and Recreation 3.00 

ncidental 2.65 

'hysician and Medicine 1.50 

felephone Rental 1.50 

Total $112.75 



THE MI'SINRSS SIDE OF FARMING 



HOUSEHOLD ACCOUNTS 




HOUSEHOLD 



FARM RECORDS 



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CASH BOOK 



8 I 



THE BUSINESS SIDE OF FARM IXC 



.1MARY OF HOUSEHOLD ACCOUNTS 



X^^-tV^- 




SUMMARY OF HOUSEHOLD ACCOUNTS 



CHAPTER VI. 

THE BALANCE SHEET AND STATEMENT. 

The balance Sheet is a condensed statement of the financial 
operations for a given period. It exhibits in tabular form the 
totals of the inventories at the beginning and end of the period ; 
the resources and liabilities; the cash receipts and expendi- 
tures ; the profits and losses ; the net profit or loss and the net 
worth. It enables the proprietor to analyze his business with 
considerable accuracy and to trace the sources of profits and 
losses. There are various forms of the balance sheet, but the 
following seems best suited to the farming business. For con- 
venience, 1 have shown the results of a month's business only. 
The inventories are obtained from separate schedules and the 
cash receipts and expenditures are the totals found in the cash 
book. The profit and loss columns are made up from figures 
found in the other columns. 

Rules for Finding the Profit or Loss. 

1. Under Resources: To the last inventory add the pay- 
ments; to the new, add the receipts. If the latter sum is the 
larger, the difference is a gain ; if small, a loss. 

2. Under Liabilities : To the new inventory, add the pay- 
ments ; to the last, add the receipts. If the former sum is the 
larger, the difference is a loss ; if smaller, a gain. 

Correction of the Profit and Loss Statement. 

From a thoughtful examination of the above balance sheet, 
it becomes evident that the Profit and Loss statement does not 
exhibit the actual result of the month's work. The stock ac- 
count, for example, has been debited only with articles pur- 
chased, and credited with returns from animals sold. Labor 
expended on the stock has not been taken into account; nor 
has stock been debited with the feed consumed. In order to 
make the proper corrections, reference is made to the labor 
and feed records, and the proper charges made. Each account 
is corrected as follows: 

(35) 



THE BUSINESS SIDE OF FARMING 



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CASH 


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GENERAL BALANCE SHEET 



FARM RECORDS 37 

Stock. 

Present Inventory (Bal. Sheet) $2,145.00 
Receipts (Bal. Sheet) 162.00 

Total $2,307.00 $2,307.00 

Last Inventory (Bal. Sheet $1,966.00 

Payments (Bal. Sheet) 90.90 

Labor (Bal. Sheet) 100.00 

Grain (Feed Record) 25.00 

Hay (Feed Record) 22.00 

Int. 1-2 per ct. on $1,966 (1 mo.) 9.80 

Dep. 1-6 per ct. on $1,966 (1 mo.) 3.25 

Total . $2,216.95 $2,216.95 

Net Gain on Stock $ 90.05 

Grain, Hay, Orchard, Dairy, and other accounts of produc- 
tion may be treated in the same manner, if desired. No spec- 
ial book or form is needed for. the above. A page of the Day 
Book may be used for each account. 

Statement for Publication. 

Ordinarily there is no need of preparing any further state- 
ment than the Balance Sheet, but since the farmer is fre- 
quently called upon to act as treasurer or to consider financial 
report of either private or public character, I have deemed it 
advisable to suggest the proper form at this point. Let us 
suppose that Mr. Harris has an opportunity to sell on condi- 
tion that he renders a financial statement snowing the results 
of last year's work. The tabular form of the balance sheet 
would not be readily understood by the average reader, and 
it is not at all suitable for publication. Following is a con- 
venient and comprehensive form : 

Model. 

Statement of the financial condition of the Harris Farm at 
the close of business, March 31, 1909. 

Cash Transactions from April 1, 1908, to March 31, 1909 : 

Receipts. 

Balance on hand April 1, '08 $ 126.04 

Stock 1,300.00 

Grain •. . . 712.43 

Hay 204.20 

Orchard and Garden 335.10 

Dairy Products 1,018.12 

Poultry 262.39 

Machinery and Implements sold 60.81 

Labor 155.15 

Total $4,174.24 $4,174.24 



38 THE BUSINESS SIDE OF FARMING 

Expenditures. 

Farm Implements $ 350.00 

Stock and Feed 445.20 

Machinery and Implements. . . . 225.76 

Household Expenses 1,074.40 

Trees, Seeds and Fertilizers. . . . 129.71 

General Expenses and Marketing 284.39 

Life Insurance 54.30 

Labor 435.70 

Personal Expenses 83.40 

Accounts Payable 252.32 

Interest 230.00 

Taxes 38.60 

Repairs 174.40 

Gifts 94.60 

Insurance 29.50 

Bal. on Hand and in Bank 271.96 

Total $4,174.24 $4,174.24 

Profits and Losses from April 1, 1908, to March 31,1909. 

Profits. 

Farm $ 100.00 

Stock 837.30 

Grain 714.57 

Hay 242.95 

Orchard and Garden 340.10 

Dairy Products 1,018.12 

Poultry 262.94 

Life Insurance 9.10 

Total $3,525.08 $3,525.08 

Losses. 

Machinery and Implements $ 60.95 

Household 1,042.00 

Trees, Seeds and Fertilizers. . . . 129.71 
General Expense and Marketing 276.59 

Labor 230.55 

Personal Expenses 83.40 

Interest 230.00 

Taxes 38.60 

Repairs 174.40 

Gifts 134.60 

Insurance (Fire) 29.50 

Net Profit 1,094.78 

Total $3,525.08 $3,525.08 



FARM RECORDS 39 

Resources and Liabilities. 

Resources. 

Farm, 160 A. and Buildings. .$ 9,070.00 

Cash and Bank 271.96 

Stock 1,948.50 

Grain 380.00 

Hay 168.75 

Orchard and Garden 45.00 

Poultry 100.55 

Machinery and Implements. . 953.00 

Household Accounts 682.40 

Supplies on hand 37.80 

Paid-up value of Life Ins 1,136.80 

Total $14,794.76 $14,794.76 

Liabilities. 

Labor Unpaid $ 35.00 

Bills Payable 3,200.00 

accounts Payable 90.00 

Church Subscription, Unpaid . . 40.00 

Net Worth 11,429.76 

Total $14,794.76 $14,794.76 



CHAPTER VII. 

COST OF PRODUCTION. 

Too often a good farm is compelled to carry unprofitable 
experiments and the whole business is pronounced a failure 
without an adequate attempt to find a remedy. In addition to 
the foregoing records, Mr. Harris has kept accurate cost ac- 
counts of the main branches of his business. In cost account- 
ing there are four principal elements to consider: Cost of 
material, labor, interest, and depreciation. The cost records 
are independent of all the rest and may be kept of every branch 
of the business, if desired, or limited to one or more phases. 
Li this instance, cost records have been kept of Live Stock, 
Grain, Hay, Dairy Products and Improvements. The Agricul- 
tural Experiment Stations are always willing to give the far- 
mer important advice and assistance regarding the stock, grain, 
fruit, etc., best adapted for different localities and purposes. 
But conditions frequently arise where it is important for the 
farmer to carry on his own experiments. Your own Experi- 
ment Station will doubtless be glad to co-operate and suggest 
methods for carrying on such experiments even to the extent of 
furnishing necessary blanks and material. Important bulletins 
on the subject may be had for the asking from the Department 
of Agriculture, Washington, D. C. 

The following announcement in the Crop Reporter for May, 
1908. indicates what the government is doing in this direction : 

"Cost of Producing Farm Products." 

"The Bureau of Statistics is making an investigation of the 
cost of producing farm products in different parts of the 
United States. Blank forms have been printed upon which 
to make reports, and this Bureau desires to receive the names 
of such farmers as have kept records of cost of producing crops, 
or are well informed upon the subject of cost of crop produc- 
tion in their locality, in order that blank schedules may be sent 
to them to fill in. Individual reports will not be published — 
only the average of many reports. Names should be sent to 
the Bureau of Statistics, Department of Agriculture, Wash- 
ington, D. C." 

Every farmer should avail himself of this important free 
service. "Keeping posted" is one of the characteristics 
of the progressive and successful farmer. There are two ex- 
ceptionally valuable bulletins on the subject which ought to be 
in the library of every farmer: U. S. Department of Agricul- 

(40) 



FARM RECORDS 



41 



ture, Bureau of Statistics, Bulletin No. 48, and University of 
Minnesota, Agr. Ex. Station, Bulletin No. 97. 

Live Stock. 

Either ot three methods may be employed in finding the cost 
of live stock. 

First Method. Ascertain exactly the total amount of grain, 
hay, and roughage on hand at the beginning of the year, and 
produced during the year. From this subtract the quantity 
sold, including amount used by household and for seed, and 
the amount on hand at the end of the year. The difference is 
the quantity used for live stock. The value at market prices 
is the expenditures of feed for live stock. 

Find the total amount received for dairy products, including 
amount used by the household. The difference between the 
cost and the receipts is the gain. The disadvantages of this 
method is that no account is taken of individual animals nor of 
different kinds of stock. The herd as a whole may be a paying 
investment and still there may be individual animals carried at 
a loss. It is desirable that such records be kept, at least occa- 
sionally, as will enable the farmer to eliminate unprofitable 
animals. , 

Second Method. The following actual record of a dairy herd 
of twelve cows illustrates a much more satisfactory test than 
the preceding. Individual record was kept of the milk 
produced by each cow, but the feed was weighed for the 
entire herd, and the average cost charged to each animal at 
market prices. 

With this average before him, a careful feeder will be able to 
make mental corrections for each individual animal, accurate 
enough for most practical purposes. The milk record has 
been kept, as illustrated on page 46. 

Tests of Dairy Herd for March, 1909. 



No. 


Lbs. Milk 




Lbs. 


Val. at 


Cost of 


Net 


Cow 


for Mo. 


*Test. 


Fat. 


36c 


Feed. 


Profit. 


1. 


465 


4.5 


20.93 


$ 7.53 


$6.21 


$1.32 


2. 


372 


5.0 


18.60 


6.70 






.49 


3. 


620 


5.0 


31.00 


11.16 






4.95 


4. 


372 


7.0 


26.04 


9.37 






3.16 


5. 


496 


4.8 


23.80 


8.57 






2.36 


6. 


682 


4.7 


32.05 


11.54 






5.33 


7. 


558 


4.4 


24.55 


8.44 






2.23 


8. 


620 


4.1 


25.42 


9.15 






2.94 


9. 


496 


4.2 


20.83 


7.50 






1.29 


10. 


651 


4.9 


31.90 


11.48 






5.27 


11. 


558 


5.0 


27.90 


10.04 






3.83 


12. 


589 


5.0 


29.45 


10.60 






4.39 






42 THE BUSINESS SIDE OF FARMING 

Peed for the Month of March. 

Hay, 4,900 lbs. at $9.00 per ton $22.05 

Kale, 9,600 lbs. at $2.50 per ton 12.00 

Bran, 1,800 lbs. at $30.00 per ton 27.00 

Shorts, 900 lbs. at $30.00 per ton 13.50 

Total $74.55 

74.55 divided by 12 equals 6.21, average cost of feed. 
Third Method. The difference between the second and third 
methods is that in the latter accurate records are kept of indi- 
vidual feed rations, while in the second method an average is 
taken. The error resulting from averaging the feed between 
all the animals in a large herd may be such as to unduly favor 
certain animals and do injustice to others. The only absolutely 
accurate method is to keep an account with each animal; at 
least with such animals as show a tendency to be unprofitable. 
Page 43 shows an individual account with one of the milch 
cows on the Harris farm. It is arranged on the regular ledger 
form. Opposite pages of the Day Book may also be used. The 
detailed information regarding Feed, Milk, Labor, etc., is found 
in the respective records, illustrated on pages 46 and 47 respec- 
tively. Similar accounts are kept of each animal, tested prefer- 
ably during the entire lactation period. It is only in this way 
that the careful farmer can determine whether each animal is 
kept at a gain or a loss. The weeding out of one or two un- 
profitable animals a year will pay for the labor of keeping the 
cost records many times over. 

Cost of Crops. 

The principles laid down in respect to the cost of animal 
products hold true also for the cost of farm crops. Two meth- 
ods suggest themselves. Accounts with the various crops and 
accounts with the different fields. Either method requires de- 
tailed records of the labor, seed, fertilizer, etc., extended on 
the crop and of returns not only for cash sales, but for products 
used by the household and for feed. On page 43 is illustrated 
an account with the wheat crop in 1908. Only one item needs 
explanation, that of depreciation due to continuous cropping. 
Whether the rate, two per cent, is too high or too low, matters 
little; the important point to be emphasized is that the value 
of the land diminishes unless rotation of corps is practiced . 

* These figures were obtained by the Babcock test, which is des- 
cribed in every modern work on dairying. 



FARM RECORDS 



43 











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SPECIAL RECORDS. 

There are several convenient special records which ought to 
be adopted, besides those I have illustrated. It is not neces- 
sary that expensive printed books be provided. A plain sheet 
of paper may be ruled as suggested below and pasted in the 
Bill File. In fact, this is in many respects preferable to 
printed forms, because the forms can then be changed from 
year to year to suit conditions. I illustrate only the following : 

Labor Records. 

The best form of a labor record is illustrated on pages 4B and 
48. In one, account is kept with the object upon which labor is 
expended ; in the other, with the laborer. For ordinary pur- 
poses, page 46 is the most convenient, but where several men 
are engaged on a project, form (a) , page 48, is preferable 

Milk Records. 

Two milk records are illustrated on pages 46 and 48. Each 
possesses certain advantages over the other. The weekly record 
need not be so large and admits of larger space, while the 
monthly record exhibits the entire month's result on a single 
page. The weekly record is more appropriate for filing, being 
less liable to soiling. Whichever form is used, it should be 
tacked to a board in a convenient place for the milker. A 
spring scale, graduated to hundredths, should be hung near 
the record, far enough from the wall for the pail to hang freely. 
The original records should be filed for at least a year. If a 
daily time book is kept, it may also be adapted for the milk 
and poultry records. 

Poultry Records. 

Practically the same form as the milk record can be used 
conveniently for the Egg record, and it is not deemed necessary 
to enlarge further on the subject. 

The methods of improving the poultry stock, and other use- 
ful information regarding the poultry business, is found in 
numerous books and bulletins on the subject. 

Duplicating Sales Hook. 

It is often convenient to retain a duplicate of sales, orders, 
receipts, etc. It will be found very helpful to the farmer and 
to the dealer alike, if the farmer prepares a bill of the produce 
he brings into town for sale. This will often avoid misunder- 

(44) 



FARM RECORDS 45 

standing, and may save money. This is especially true if the 
produce is sent in by children or by someone not connected 
with the family. On page 48 is illustrated a very convenient 
book which is kept in stock in most stationery stores. Where 
this system is used, it is advisable that every sale be recorded, 
and then listed as shown on. page 47 . In entering in the Cash 
Book, the sale number should be inserted. All sales to mer- 
chants should be considered as cash, even if the produce is 
exchanged for merchandise. If sales are made on time, note 
the fact on the bill, and enter it into the personal account as 
illustrated on page 19. 

The Farm Plot. 

There is one more record which I cannot urge too strongly. 
I refer to the yearly plots. This record will prove to be one 
of the most valuable and interesting parts of the farm history. 
A plot is easily made by first drawing a square on a blank 
piece of paper and then sketching the fields. It is, of course, 
unnecessary to draw this to scale. A close approximation is 
all that is necessary. Following is an illustration : 

Office Methods. 

Talk about office methods on the farm! Why not? Why 
should not the average farmer enjoy at least a comfortable 
desk and neatly printed stationery? Every boy loves "to do 
business." Surround him with a business atmosphere on 
the homestead and he will stay by you and succeed you in 
your old age; continue in your slip-shod methods and he will 
move to town and become a $40 clerk instead of a landed pro- 
prietor. Encourage your children to assist in your business; 
make them feel that they are intimately associated with you. 
Take them into your confidence and, as they grow older, into 
your counsel, especially when you are considering your annual 
balance sheet and a greater prosperity, wider influence, and 
a more contented family will be your reward. 



46 



THE BUSINESS SIDE OF FARMING 



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47 



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49 



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THE FARM PLOT 



CHAI'TKIt IX. 

PRACTICE WORK IN SINGLE ENTRY. 

LESSON 1. 
THE DAY BOOK. 

Step 1. Number the pages of all your books. 

Step 2. Write at the top of page 1, of your Day Book: 
Monday, April 1, 19—. Then copy in your Day Book the fol- 
lowing opening statement: (All work must be done neatly 
in ink on forms prescribed by your teacher.) 
Directions. 

Six years ago to-day I purchased my present farm, investing, 
cash, $6,000. Below is an accurate inventory of all my prop- 
erty, and a statement of my affairs as they stand today. 

Step 3. Skip one line, then arrange the following state- 
ment of Resources and Liabilities exactly as illustrated on 
page 15 : 

Inventory, April 1, 19 — . 

Resources: Farm, 160 A.; with buildings, $8,000. Pro- 
duce : 200 bu. Corn at 50c ; 150 bu. Oats at 45c ; 200 bu. Wheat 
at 85c; 20 tons Hay at $6; Potatoes and Vegetables, $50.00. 
Stock: 6 Horses, average $100.00; 20 Cows, average $40.00; 
11 Steers, average $12.00; 5 Heifers, average $11.00; 12 Hogs, 
average $6.00; 100 Sheep, average $3.00. Poultry: 150 
Chickens at 45c; 21 Turkeys at 75c. Implements: 1 Binder, 
$125.00; 2 Plows at $10.00; 2 Harrows at $12.50; 1 Mower, 
$40.00; 1 Hay Rake, $15.00; 1 Grain Drill, $50.00; 2 Wagons, 
$110.00; 2 Sets Harness, $90.00; 1 Buggy, $100.00; Tools, 
$50.00. Supplies, $25.00; Household Goods, $350.00; Life In- 
surance (paid-up value), $964.36; Cash, $170.00. 

Liabilities: Labor (unpaid), $75.00; Accounts Payable, 
$125.15; Mortgage, favor Iowa Trust Co., $3,000.00. 

Step 4. Hand in your work for approval. 

LESSON 2. 
DAY AND CASH BOOK COMBINED. 

Copy the following entries in the Day Book on the next page 
following the last statement. (See page 12.) 

Head the pages and columns the same as in illustration. 

Monday, April 1, Cash on hand, $170.00. (Received 
Column.) 

(5o) 



FARM RECORDS 51 

Monday, April 1, 1908, Heavy rain storm. Shod Cap and 
Maud at Scowscroft's. Paid $3.00. Bought two tons of coal 
at $4.00. 

Tuesday, April 2. (Skip a line between each date.) At- 
tended Breeders' Convention at Portland. Program and re- 
port pasted on page 16 in Bill File. Paid expenses $8.40. 

Wednesday, April 3. Paid grocery bill at Murdock's. Bill 
on file, page 16.— $11.40. 

Thursday, April 4. Bought milch cow of J. C. Smith. Paid 
Cash $40.00. 

Attended concert of the Boston Jubilee Singers, with fam- 
ily. Paid expenses, $2.00. 

Friday, April 5. Sold one calf to P. A. Anderson for Cash, 
$7.00. Bought 1 pair Gloves, $1.50. 

Saturday, April 6. Bought at La Fount's for Cash : 1 Ax 
$1.00, 1 Hammer 45c, Nails 50c; Total $1.95. 

Went to Portland to select Farm Implements. Expenses, 
$3.00. 

Sunday, April 7. Attended church with family; Dr. E. 
Hamilton preached on "Civic Honor.' Collection 25c. 

Tuesday, April 9. Bought shoes for Teddie, $2.00. 

Wednesday, April 10. Bought 5 bu. tested seed corn at 
$2.00. 

Thursday, April 11. Rain all day. Fannie dropped calf. 

Friday, April 12. Sold 3-year-old horse, Cap, for $125.00. 

(The names of days may be omitted or continued.) 

April 13. Bought 1 Studebaker Top Buggy. Price $135.00, 
discount $15.00. Net amount paid, $120.00. 

April 14. Attended church with family. Our pastor 
preached on "The Prodigal Son." Collection 25c. Paid quar- 
terly dues, $10.00. 

April 15. Mother took sick suddenly. Dr. Brown considers 
her case very serious. 

April 16. Hired Frank Johnson for six months at $30.00 
per month and board. Mother is better. 

April 17 to 28. Student will insert at least one imaginary 
entry for each date. Try to use good judgment as to what 
might happen and what might be purchased and sold during 
this month. Be careful not to pay more money than you have 
received. 

April 29. Paid the following bills: Skinner Bros., Dry 
Goods. Bill pasted on page 17, Bill File, $14.50; Murdock's, 
Groceries. Bill File, $15.60. 

Sold Murdock's 20 doz. Eggs, at 20c; 12 Dressed Spring 
Chickens at 30c. 

April 30. Received cream check. See statement Bill File, 
page 18, $45.30. 



THE BUSINESS SIDE OF FARMING 

You will now add the "Received" and "Paid" columns and 
find the Cash on hand. Hand in your work for approval. 

LESSON 3. 
SPECIAL CASH BOOK. 

As stated on page * it is often convenient to keep a separate 
Cash Book instead of entering all the Cash transactions in 
the Day Book. For the sake of practice, you may now pre- 
pare a Cash Book with the same cash entries as given in the 
Day Book above. The form is shown on page * . 

Hand in your work for approval. 

LESSON 4. 
PERSONAL ACCOUNTS. 

Read the remarks regarding personal accounts on page 20. 
Turn to near the end of your Day Book and prepare two sets 
of accounts, one entitled "Others Owe Us" and another "We 
Owe Others." 

(1) "Others Owe Us." Mrs. Richard King, a neighbor, 
has been buying dairy and poultry products on account. Her 
account is illustrated on page 19. Prepare a similar account 
with the following entries : We charge her : 

May 1. There was a balance due from April, $3.80; May 1, 
1 lb. Butter 20c ; May 3, 2 doz. Eggs at 15c ; May 5, 1 chicken 
30c; May 12, 2 lb. Butter 20c; Mav 18, 2 qts. Strawberries 30c; 
May 25, 1 qt. Cream 20c ; May 31, 1 lb. Butter 20c. 

May 31. She paid cash $5.00. 

Balance the account as illustrated. 

In a similar manner prepare an account with the Adams 
Mercantile Co., with whom we are trading and who are buying 
produce from us. We charge them : 

June 4. 5 bu. Potatoes at 75c ; 60 bunches Onions, 40c doz. ; 
10 doz. Sweet Corn at 20c. On the same date we bought 
goods as per their bill, pasted on page 17 in the Bill File, $6.50. 
We charge, June 15, 8 crates Strawberries at $1.75; 20 doz. 
Eggs at 15c. On the same date we bought a suit for William 
for $13.00. Prepare this account, rule and balance the same 
as Mrs. King's account. The balance due us is $5.25. 

In a similar manner prepare three additional original ac- 
counts of not less than ten entries to each. 

(2) "We Owe Others." Frank Johnson, one of the 
farm hands, has requested that his wages be left on account, 
and that he be allowed to draw as he needs from time to time. 
The following items enter into his account. Prepare it exactly 
the same as the five preceding accounts. April 30, wages 
lor April, $30.00; May 1st, paid him cash, $10.00; May 
5th, bought clothing for him at Goddard's $7.20; May 10th, 

* Not illustrated 



FARM RECORDS 53 

cash $5.00; May 20th, cash $3.00; May 31st, wages for May 
$30.00. Rule and balance as heretofore. 

On July 1st you bought a 3-year-old horse "Jim" for $150. 
on condition that it was to be paid for at the rate of $25.00 
per month. Four payments have been made on the first of 
each month, beginning August 1st. Write up the account. 
Rule and balance as heretofore. 

Prepare three additional original accounts, as above. 

LESSON 5. 
FINANCIAL STATEMENT No. 2, APRIL 1, 19 — . 

We have now arrived at the end of the year and we are ready 
to prepare the second financial statement. 
Directions. 

Step 1. Take inventories of all the property, listing and 
placing a fair valuation on it, same as in Lesson 1. 

Step 2. Go through your personal accounts, balance them 
as illustratea in Lesson 4, and extend the amounts under the 
various headings in the inventory, Grain, Stock, etc. 

Step 3. If you own any notes, stock or other valuables, 
list them under Bills Receivable. Be sure not to omit anything 
you own or owe. 

The above directions merely indicate how an inventory is 
taken. The following inventories are assumed and you will 
merely prepare a statement exactly the same as in Lesson 1. 
Be sure to arrange heading, etc., exactly as heretofore. Com- 
pare the values and find totals. See page 17. 

Inventory, April 1, 19 — . 

Resources. 

Farm, $8,620.00. Produce: 150 bu. Corn at 55c; 175 bu. 
Oats at 43c ; 253 bu. Wheat at 87c ; 20 tons Hay at $6.50 ; Pota- 
toes and Vegetables, $40.00. Stock : 6 Horses at $100.00 ; 1 
3-year-old horse, "Jim," $150.00; 22 Cows at $42.00; 14 Steers 
at $13.00; 4 Heifers at $11.00; 11 Hogs at $6.00. Poultry: 
165 Chickens at 45c ; 25 Turkeys at 75c ; 10 Geese at 70c. Im- 
plements : 1 Binder, $120.00 ; 2 Plows at $18.00 ; 2 Harrows 
at $20.00 ; 1 Mower at $40.00 ; 1 Hay Rake at $13.00 ; 1 Grain 
Drill, $45.00; 2 Wagons, $40.00 and $60.00; 1 New Wagon, 
$100.00 ; 2 Sets Harness, $25.00 and $65.00 ; 1 Surrey, $165.00 ; 
1 Light Buggy, $50 ; Tools, $50. Supplies, $30.00. Household 
Goods, $350.00. Piano, $300. Life Insurance, $1073.40. Cash 
and Bank, $126.04. 

Liabilities. 

Labor, unpaid, $85.00. Accounts Payable, $142.32. Mort- 



.,1 THE BUSINESS SIDE OK FARMING 

gage, favor Iowa Trust Co., $3,000.00. Note, favcr Western 
Lumber Co., $200.00. Due on Piano to Smith Bros., $200.00. 
Having completed the statement of Resources and Liabilities 
you will now determine the profits for the year. Skip one line 
and write the following statement, inserting the net worth in 
Statement No. 1 and what you find above. 

Statement of Profits and Losses. 

Net worth now 

Net worth last year 

Net profit 

Your result will agree with the illustration on page 17, if cor- 
rect. Dividing the gain with last year's net inventory we find 
that you have made a gain of about 9 per cent on your invest- 
ment and labor. 



CHAPTER X. 



PRACTICE WORK IN DOUBLE ENTRY. 

Tne last year has demonstrated the value of bookkeeping, 
but the Profit and Loss statement is very unsatisfactory. The 
entire business shows a profit of $851.02, but it is impossible 
to show from the records the sources of the profits and losses. 
George will continue keeping the books, for which he will 
receive $5.00 per month, but we have decided to use double 
entry next year. Ninety dollars per montn, payable three times 
per month, and produce, will be allowed for household and 
personal expenses as suggested on page 29. 

LESSON 6. 
HOUSEHOLD ACCOUNTS. 

Following are the Household Receipts and Expenditures for 
the Month of April, 1908 : 

April 1. Balance forwarded, $15.40 ; on Allowance, $30.00 ; 
Shoes for Mabel, $3.00; 2 Vests, $1.00; 10 yds. Muslin at 10c; 
4 yds. Gingham at 15c. 

3. Sugar, $1.00; Raisins, 25c; subscription to Successful 
Farming, $1.00; subscription to Ladies' Home Journal, $1.75. 

5. Collection, 25c ; Ladies Aid Society, 25c ; 2 doz. Eggs, 40c ; 
Medicine, 50c; Stove Polish, 10c. 

6. Doctor, $1.00; Ella, 25c; George, 50c; Necktie for Jim, 
25c ; 5 bu. Potatoes at 40c ; Skillet, 50c. 

8. 5 Cabbage, 25c; Bread Knife, 40c; Meat, 50c; Parlor 
Lamp, $3.00. 

9. 3 lbs. Crackers, 25c ; Peanuts, 10c ; Eggs, 50c ; to boys for 
ball game, 50c; Starch, 10c; Relief Society, 50c. 

12. Collection, 35c. 

13. Rocker, $7.00; Prunes, $1.00; on Allowance, $30,00; 
Coal, $5.00 ; Vegetables, 40c. 

14. Suit for William, $6.00 ; Hat for George, 75c ; Concert, 
$1.00; 2 yds. Ribbon, 40c; 1 doz. Plates, $2.20; one-half doz. 
Caps and Saucers, 90c. 

15. School books and stationery, $2.40; Kerosene, 75c; 
Ham, $1.35; Sociable, 50c; Shoe Strings, 10c. 

17. Kitchen Cabinet, $6.50; 2 Chairs, $1.30; Laundry, 95c; 
Toilet Soap, 25c; 3 lbs. Fish, 45c; Towel Rack, 25c. 

19. Collection, 25c. 

20. 6 yds. Toweling, 60c; Tacks, 10c; 1 gal. Vinegar, 30c; 

(55) 



56 THE BUSINESS SIDE OF FARMING 

Matches, 25c; White House Cook Book, $1.50; Carbolic Acid, 
10c. . 

23. Telegram to M. F. & Co., 50c; Telephone Rental, $1.50; 
Mrs. Sloan for Dressmaking, $2.50; Madrid and return, $2.00. 

25. 1 pr. Rubbers, 75c; Stockings for Ella, 50c; Flowers 
for Mrs. Knox's Funeral, $1.00; Allowance, $30.00; Laundry, 
65c; Lamp Wicks, 10c. 

26. Collection, 25c. 

29. Meat, uity Market, as per Bill File, $9.50; Groceries 
at Murdock's, as per Bill File, $4.40; Help for the Month, 
$10.00. 

30. Vegetables for the month, $2.60; Poultry, $5.40; Milk, 
Cream and Butter, $6.50. 

Directions. 

Step 1. Enter in the household record and distribute in 
the proper columns, as ; llustrated on page 32 . The 
first twelve days are given exactly as they will appear in your 
books, if correct. 

Step 2. Add all the columns (Use lead pencil until you 
have proved your work). If your work is correct, you will 
find the following totals: Receipts: Cash, $105.40; Produce, 
$5.25; Dairy and Poultry, $12.80. Payments: Groceries, 
$12.65 (correction, line 8, 40c) ; Meat, $11.80; Dairy and Poul- 
try, $12.80 ; Clothing, $16.85 ; Furniture and Utensils, $22.05 ; 
Help and Laundry. $11.60; Library, $6.65; Medicine and Phy- 
sician, $1.50; Light and Fuel, $6.10; Gifts, $2.35; Personal, 
$1.25; Traveling and Recreation, $3.00; Incidental, $4.15. 

LESSON 7. 
FARM RECEIPTS. 

In the same manner as in Lesson 6, you may proceed to 
enter Cash Receipts for April, 1908. See form on page 22. 
Your entry will be exactly like the illustration, if correct. Ob- 
serve that each amount is entered twice: (1) In the total 
column, and (2) in the distribution columns. Hence the term 
"Double Entry." 

April 1. Balance forwarded, $126.04. (Total and Sundry 
Columns.) 

1. 2 tons Clover at $6.00; 80 bu. Corn at 65c. 

3. 1 doz. Cabbage at 10c ; 25 lbs. Butter at 25c. 

6. 2 Steers at $40.00 ; 20 Spring Chickens at 45c ; Hauling 
Coal, 1 day, $5.00. 

9. Jersey Calf, $10.00; 2 cords Wood at $4.00; 5 bu. Pota- 
toes at $1.00. 

12. Heifer : $25.00; 10 lbs. Butter at 28i/>c. 

13. 75 bu. Corn at 65c; Work on County Road, $5.00; 4 
bu. Apples at $1.50. 



FARM RECORDS 57 

15. 201/2 doz. Eggs at 20c; 36 lbs. Butter at 25c; 2 tons 
Clover at $6.00. 

17. 100 Apple Trees at 20c ; 1 Steer, $37.00 ; 12 Cedar Posts 
at 20c. 

19. 6 Spring Chickens at 40c; 95 bu. Corn at 60c; 3 tons 
Hay at $6.00. 

20. Jersey Calf, $10.00 ; 50 bu. Oats at 35c. 
23. 1 Turkey, $1.40; 1 bu. Clover Seed, $1.50. 
26. 18 lbs. Cheese at 15c. 

29. 3 Cords Wood at $4.00; 10 bu. Barley at 40c; 4 tons 
Timothy at $5.50. 

30. Produce for Household Use: Orchard and Garden, 
$5.25 ; Dairy, $6.50 ; Poultry, $6.30. 

Directions. 

Step 1. Turn to page 2 in your Cash Book and enter the 
preceding items in the proper columns. 

Step 2 Add the columns. The correct results are as fol- 
lows : Total, $650.54 ; Grain $79.25 ; Hay, $65.50 ; Orchard and 
Garden, $34.85 ; Stock, $162.00 ; Dairy, $27.30 ; Poultry, $23.20 ; 
Sundries, $158.44. 

Note that the total of the distribution columns equals the 
total column. 

Steu 3. The Sundry column contains the following items : 

Balance April 1st $126.04 

Labor 10.00 

Wood 22.40 

Total $158.44 

Verify the above by setting down each item under its ap- 
propriate head and adding. Arrange your work as illustrated 
on page 25. 

LESSON 8. 

FARM EXPENDITURES. 

Next enter the Expenditures for April. 

Step 1. Turn to page 3 in your Cash Book and enter. (See 
page 23). 

April 1. On Household Expenses, $30.00. (Total and House- 
hold columns.) 

1. 12 bu. Seed Wheat at 83 l-3c. 

3. Labor in Garden, $1.50; Shod Cap and Maud, $3.00. 

5. Interest M. P. Co., $20.00; Jersey Cow, $65.00; Laths 
and Shingles, $3.75. 

6. Garden Seed, $1.60; Road Tax, $3.00. 

8. Addition to barn (contract), $80.00; Crates and Bags, 
$15.40. 

9. Wages to Johnson, $10.00 ; Steel Frame Grindstone, $3.50. 



THE BUSINESS SIDE OF FARMING 






12. 200 ft. Lumber, $10.00 per M. ; 1 Shovel, $1.25. 

13. On Household Expenses, $30.00; John Smith, labor, 
$2.50; Staples, 35c. 

14. Taxes, $30.40. 

15. Cash for personal use, $3.50 ; 1 Rip Saw, $2.50 ; Paid O. 
N. Smith in full, $15.80. 

17. Pruning Orchard, $2.50 ; Chicken Feed, $5.00. 

19. Manure from Kimball Livery, $15.00; Horse Shoeing, 
$2.50; Trip to Ames, $4.50; Patent Fertilizer, $6.40. 

20. Leghorn Pullet, $2.10; Plastering and Paperhanging, 
$15.00; 2 Halters at 90c; Wages to Johnson, $10.00. 

23. On Household Expenses, $30.00; Trees and Shrubs, 
I. N. C, $25.80; Alfalfa Seed, $3.20; 2 doz Leghorn Eggs, 
$5.80. 

25. Interest on Binder note, $2.00; Angora Goat, $10.00; 
Private Expenses, $5.00; Half doz. Gopher Traps, $1.50. 

26. Repairs on Horse Stalls, $13.50 ; 1 Keystone Dehorner, 
$10.50. 

29. 2 Geese, $3.00 ; Wages to Johnson, $10.00 ; Apple Boxes, 
$3.75. 

30. Butter Wrappers, $1.75; Life Insurance Premium, 
$35.10; Produce for Household, $18.05. 

Step 2. Add the columns. The correct results are as fol- 
lows : Total, $575.20 ; Household and Personal, $113.95 ; Seeds 
and Fertilizers, $62.00; Hired Labor, $36.50; General Ex- 
penses and Marketing, $30.90; Stock and Feed, $90.90; Machi- 
nery, Implements and Tools, $21.05; Repairs, $111.60; Sun- 
dries, $106.30. Note that the total of the distribution columns 
equals the total column. 

Step 3. By going through the Sundry column we find that 
it contains the following: 

Interest $ 22.00 

Taxes 33.40 

Accounts Payable 15.80 

Insurance 25.10 



Total $106.30 

Step 4. Classify the Improvements and Repairs column. 
The correct result is as follows : 

improvements $ 80.00 

Repairs 34.60 



Total $114.60 

Step 5. Balance the Cash by taking the difference between 
the Receipts and Expenditures. The correct difference is 
$74.34. 



FARM RECORDS 59 

LESSON 9. 
THE BANK ACCOUNT. 

Ve have found it profitable and convenient to carry an ac- 
count with the Citizens' National Bank, and the transactions 
during the month have been as follows: Deposits, April 1, 
$98.75; (6), $90.00; (9), $40.50; (13), $125.00. The checks 
drawn, beginning with No. 350, are as follows : April 1, Mrs. 
Martin Harris, $30.00; Odell Seed Co., $10.00; (3), Emma 
Johnson, $1.50; Brown & Pickett, $3.00; (5), Salem Imple- 
ment Co., $20.00; E. Skidmore, $65.00; Empire Lumber Co., 
$3.75; (6), County Recorder, $3.00; (8), Earle & Crockett, 
$80.00; Farmers' Supply Co., $15.40; (9), Frank Johnson, 
$10.00; Goddard Hardware Co., $3.50; Mrs. Martin Harris, 
$30.00 ; Crown Fertilizer Co., $6.40 ; O. N. Smith, $15.80 ; (13) , 
County Treasurer, $30.40; Kimball Livery Co., $15.00; Brown 
& Pickett, $2.50; (20), C. J. Olson & Son, $15.00; Horning & 
Bacon, $10.00; Crawford Hardware Co., $10.50. 
Directions. 

Step 1. Enter the above on a sheet of Journal paper, as 
illustrated on page 27. Extend the balances after numbers 
351, 354, 358, 368 and 370. 

Step 2. At the end of the month add the checks and de- 
posits and find the difference. The resulting balance should 
be $29.80. 

Step 3. The bank has returned your Pass Book with the 
canceled checks. You have arranged them numerically and 
find that all are returned except Nos. 361, 366 and 369. In 
other words, the bank has paid all except these checks. By 
adding the outstanding checks to your balance you find that 
the bank balance ought to be $58.30, which you find agrees 
with the Pass Book. The canceled checks should be filed 
numerically and kept for future reference. An endorsed check 
is a valid receipt. 

LESSON 10. 
FINANCIAL STATEMENT No. 3. 

Under ordinary circumstances a financial statement should 
be made out only once a year, but for additional practice you 
may prepare a Balance Sheet at the end of the first month. 
As will be observed on page 35, the Balance Sheet is a con- 
densed statement of the last year's inventory and the new; 
the total Cash Receipts and Expenditures as they appear in 
the different columns of the Cash Book, and, finally, a detailed 
statement of Profits and Losses. Your Balance Sheet will be 
exactly like that on page 36, when completed. The new in- 
ventories are as follows: Farm, $8,700.00; Cash and Bank, 



60 'I'll 10 1U.TSINESS SIDE OF FARMING 

$74.34 ; Stock and Feed, $2,145.00 ; Grain $105.00 ; Hay, $55.00 ; 
Orchard and Garden, $35.20 ; Dairy Products, $26.30 ; Poultry, 
$122.80; Machinery, Implements and Tools, $870.05; House- 
hold Accounts, $650.00; Life Insurance, $1,136.80; General 
Supplies, $25.00; Hired Labor, $85.00; Bills Payable, $3,200.00; 
Accounts Payable, $326.52. 
Directions. 

Step 1. Turn to the first Balance Sheet ( cover of the Cash 
Book). Enter in column 1 the Inventories (Resources and Lia- 
bilities found in statement No. 2). In column 2 enter the new 
inventories given above. 

Step 2. Add the Resources and Liabilities of both columns ; 
check with the totals in the illustration. Then find the Net 
Worth and the Profit or Loss. In this case there is a loss of 
$1.01, due to the fact that April is naturally an unproductive 
month for the farmer. 

Step 3. Enter the total Receipts and Expenditures from 
the Cash Book into columns 3 and 4 respectively as shown on 
page 86 . The Cash Balance is entered in column 2 opposite 
Cash. Add and see to it that the columns balance . 

Step 4. You will now find the Profits and Losses. The 
first item shows neither profit nor loss, since the payment 
equals the difference between the inventories. In Stock and 
Feed there is an increase in inventory of $179.00 and the re- 
ceipts exceed the expenditures by $71.10; hence a profit of 
$250.10. By a careful study of the illustration you will have 
no difficulty in finishing the Balance Sheet. The total profits 
are $433.05; the losses, $434.06; hence we find the same loss 
as before, $1.01, which proves the correctness of our work. 

Step 5. Total all the columns as illustrated in the "Totals 
to Balance" space. 

By a carefui study of the Balance Sheet you will find very 
important differences between this statement and numbers 1 
and 2. Here you show not only the net loss, but also the 
sources of the profits and losses, as well as a statement of the 
Cash Receipts and Expenditures. Moreover, by finding the 
net profit or loss in two different ways, one proves the cor- 
rectness of the other. 



CHAPTER XI. 

PRACTICE WORK IN DOUBLE ENTRY— SET 2. 

For the purpose of additional practice you may now write up 
the last month of the year, carrying forward assumed totals 
so as to enable you to prepare a complete Balance Sheet at the 
end of the year. It will be unnecessary to give further detailed 
instructions since the steps are exactly the same as in the pre- 
ceding set. 

lesson 11. 

household accounts. 

Enter as usual the following Household Receipts and Ex- 
penditures : 

March 1. Oranges, 25c; James, 35c; Codfish, 35c; Allow- 
ance, $30.00; Coffee, $1.00; Bacon, 50c; Shoe Laces, 10c; Fish, 
25c; Veal, 10c; Whale Bone, 10c; Stove Polish, 25c. 

3. Jardinier, 25c ; Collars, 25c ; Tacks, 10c ; Collection, 25c ; 
Buttons, 10c; Tooth Brush, 25c; Talcum Powder, 25c; Stamps, 
25c; Oranges, 25c; Thread, 15c; Meat, 50c; Crackers, 25c. 

7. Help, $1.00; Roast, 55c; Delineator, 10c; Pepper, 15c; 
Comb, 25c; Oatmeal, 25c; Meat, 40c. 

9. Collection, 25c. 

10. Gloves for Ella, 75c; Postage, 25c; Starch, 10c. 

12. Chops, 25c; Beans, 25c; Mustard, 20c; Soap, 30c; 
Borax. 15c; Pattern, 45c; Muslin, 50c; Music, 20c; Gasoline, 
$1.20; Picture Frames, $3.45. 

14. Starch, 25c; Help, $1.00; Laundry, $1.00; Allowance, 
$30.00. 

15. Coffee, 35c; Music, 25c; Collection of Poems, $1.50. 

16. Collection, 25c; (17) Telephone Rental, $1.50. 

17. Steak, 30c; Rocker, $3.75; Suit for George, $15.00; 
Skirt Cleaned, 75c; Cheese, 50c; Tongue, 25c; Thread, 10c; 
Tooth Picks, 10c; Sugar, $1.00; Medicine, 50c. 

19. Lemons, 20c ; Lace, 15c ; Telegram, 60c ; Scissors Sharp- 
ened, 10c; Flour, $1.20; Graham, 25c; Rock Candy, 10c; Coal, 
$5.00; Powdered Sugar, 25c; Granulated Sugar, $1.00; Piano 
Tuned, $5.00; Oranges, 25c; Birthday present to Mother, $5.00. 

21. Laundry, 55c; Help, 75c; Pens and Pencils, 10c; Hat, 
$4.00;-Hooks and Eyes, 10c; Collar, 35c; Sugar, $1.00; Crack- 
ers, 10c; Cheese, 25c; Mustard, 10c; (23) Collection, 25c. 

24. Braid, 45c; Fish, 15c; Coffee, 45c; Picture of Baby, 
$1.50; Asbestos Pad, 15c; Roast, 45c; Oranges, 20c; Allow- 
ance, $30.00. 

(6i) 



C2 THE BUSINESS SIDE OF FARMING 

26. Help, $2.00; Tailoring, $1.45; Pepper, 10c; Needles, 
10c ; Trip to Boone, $2.00 ; Hats for George and James, $3.50. 

28. Ella, $1.00; Shoes Repaired, $1.25; Flower Seed, 25c; 
Braid, 15c ; Thread, 10c. 

29. Help for Month, $10.00; Laundry, $1.00. 

30. Collection, 35c. 

31. Butter, Milk and Cream for Month, $6.45 ; Poultry for 
Month, $4.65 ; Vegetables for Month, $2.80. 

Add all the columns. The results should be : 
Cash, $111.60; Garden, $2.80; Dairy, $6.45; Sundries, $4.65 
Expenditures: Groceries, $12.75; Meat, $3.70; Poultry and 
Dairy, $11.85 ; Clothing, $29.00; Furniture and Utensils, $7.60 
Help and Laundry, $17.30; Books and Education, $2.05; Phy 
sician and Medicine, 50c ; Light and Fuel, $6.20 ; Gifts, $6.35 
Personal, $1.35; Incidental, $13.95. Balance as before ($12.90) 

LESSON 12. 
FARM RECEIPTS. 

Enter as usual. 

March 1. Forwarded : Receipts, $3,644.34 ; Grain, $591.93 ; 
Hay, $134.95; Orchard and Garden, $277.95 ;Stock, $1,110.50; 
Dairy, $997.07; Poultry, $246.14; Sundries, $285.80. 
March 1. 2 Pigs at $6.25; (3) 20 bu. Apples, 65c; 50 bu. 

7. 3 TonsClover at $6.50; 1 Veal Calf, $9.00; 40 bu. Oats, 
45c. 

9. 25 lbs-. Dressed Chicken at 20c. 

10. 10 doz. Eggs, 15c; 1 Cow, $45.00. 

12. 1 Ton Clover, $6.50 ; Sold Old Wagon, $10.00. 

15. Hired out Team and Buggy, $4.00; Labor on County 
Road, $5.00. 

16. 50 bu. Corn at 60c; 95 Boxes Strawberries at 15c; 10 
lbs. Butter at 25c. 

19. 3 Tons Timothy at $5.75 ; 3 Days Labor for Johnson 
and Co. at $1.60; 14 doz. Eggs at 15c. 

21. 2-year-old Colt, $75.00; Strawberry Plants, $4.60;, 18 
lbs. Butter at 25c; 4qts. Cream, 15c; 4 Calves at $12.00. 

k>4. 50 bu. Oats at 40c; 10 Dressed Chickens at 30c. 

28. 50 bu. Corn at 65c ; 3 Tons Timothy at $5.00 ; Sold one 
Set Harness, $32.40 ; 2 Tons Clover at $5.50. 

30. 50 bu. Barley at 40c. 

31. Produce used for Household, $13.90. 
31. From Phoenix Hotel, $7.00 for Cream. 

Add all the columns and prove. The correct total is 
$1,174.24. The Sundry column is segregated as follows : Sale 
of Implements, etc., $60.81; Labor Earnings, $155.15; Cash 
Balance, $126.04. 



FARM RECORDS 63 

LESSON 13. 
FARM EXPENDITURES. 

Enter as usual. 

March 1. Amounts forwarded : Total payments, $3,513.63 ; 
Household ana Personal, $1,028.90; Trees, $99.66; Hired 
Labor, $386.00 ; General Expense and Marketing, $269.49 ; Feed 
and Stock, $427.85; Machinery and Tools, $172.31; Improve- 
ments and Repairs, $513.20; Sundries, $616.22. 

March 1. On Household Expense, $30.00. 

3. 200 feet Lumber, $10.00 per M. ;20 Posts, $1.60; 1 
Shovel ,$1.25. 

7. Strawberry Crates, $4.00; Assessment Farmers' Tele- 
phone Co., $2.00; Shod Prince, $1.50; ll/ 2 bu. Timothy Seed at 
$1.10. 

9. 10 bu. Rye Seed at 60c; 1 Cultivator, $25.00. 

10. Setting Tire on Wagon, $3.00 ; Half Month's Wages to 
Frank, $15.00. 

12. Advertising Garden Products, $1.20 ; Membership in 
Breeders' Association, $3.00; Incubator, $20.00. 

14. On Household Expenses, $30.00; Insu.ance, 3 Years, 
$29.50. 

15. 1 Set Plymouth Eggs, 50c. 

16. 2 Sets Leghorn Eggs, 50c; Dehorning Cattle, $3.25; 
100 lbs. Wire at 3c. 

17. Labor on Ditch No. 1, $16.50; Labels for Apple Boxes, 
$4.20 ; Garden Seeds, $3.40. 

19. Carpentry Tools, $2.50; Harness Oil, $1.00; Bran and 
Shorts, $5.60; Subscription to Y. M. C. A., $5.00. 

21. 10 lbs. Nails at 6c ; Blacksmithing as per Bill, $3.00 ; 40 
Apple Trees at 20c ; 10 Peach Trees at 25c ; Paid Frank on 
Wages, $5.00; 5 Sacks Phosphate, $8.50. 

24. On Household Expenses, $30.00 ; Labor in Orchard, 
$2.00. 

26. Shovel and Hoe, $1.50; Allowance for James at Col- 
lege, $20.00. 

28. 1 Plow Share, $3.20. 

29. Balance Wages to Frank, $10.00; 1 bbl. Salt, $2.50; 
2 Pigs, $4.50; Church Subscription, $5.00; Shingles and Nails, 
$i.00. 

30. Taxes, $38.60 ; Paid George for Keeping Books, $5.00. 

31. Produce for Household, $13.90 ; Labor in Garden, $1.20. 
Add all the columns and prove. The correct total is $3,- 

902.28. 

If you could go through the entire Sundry Column for the 
year, you would find the following items : Life Insurance, 
$54.30*; Accounts Payable, $252.32; Insurance, $29.50; Inter- 
est, $230.00; Taxes, $38.60; Charities, etc., $94.60. The Im- 



i : THE BUSINESS SIDE OF FARMING 

provement and Repair column is segregated as follows: Im- 
provements, $350.00; Repairs, $174.40. The Household and 
Personal column shows: Household, $1,074.40; Personal, 
$83.40. 

Arrange all the above as illustrated on page 23. 

LESSON 14. 
FINANCIAL STATEMENT No. 4. 

We have now arrived at the end of the second year and we 
are ready to prepare the annual Balance Sheet. This is ex- 
actly like number three in form and there is no difference in 
the method of preparing it. The new inventories are as fol- 
lows: Farm, $9,070.00; Cash and Bank, $271.96; Stock and 
Feed, $1,948.50; Grain, $380; Hay, $168.75; Orchard and Gar- 
den, $45.00; Poultry, $100.55; Machinery and Implements, 
$953.00; Household Account, $682.40; General Expense and 
Marketing, $37.80; Life Insurance, $1,136.80; Total Resources, 
$14,794.76. Liabilities: Hired Labor, $35.00; Bills Payable, 
$3,200.00 ; Accounts Payable, $90.00 ; Gifts, $40.00 ; Total Lia- 
bilities, $3,365.00. The net worth is $11,429.76; the net profit 
is $1,094.78. 

Hand in all your work, properly copied in ink, for approval. 



CHAPTER XII. 

ORIGINAL EXERCISES AND REVIEW. 

LESSON 15. 
ORIGINAL FARM ACCOUNTS. 

In order to gain additional practice and confidence in your 
work, you may now prepare an original set similar to the ones 
already worked out. Study over the work already completed, 
and if you have any suggestions and criticisms of the system 
of accounts, talk them over with your instructor. If your 
suggestions are acceptable, you may embody the changes in this 
set, otherwise you will follow the preceding sets very closely. 
The complete set must have at least five entries in each column, 
and the totals should not be far from those in the sets already 
completed. A higher grade of work is expected than hereto- 
fore. 
Directions. 

1. Prepare an inventory similar to the one shown on page 
15-. The amounts should be close to the results given in les- 
son 14. 

2. Write two months' imaginary entries as close to actual 
experience as possible. Students from the farm should secure 
the material from home or from farmer friends. 

3. Complete the year's work by taking estimates for the 
remaining months. 

4. Prepare a closing inventory for the end of the year. 

5. Prepare a Balance Sheet similar to the one given on 
page 36. 

6. Hand in your work with suggestions and criticisms. 

LESSON 16. 
ORIGINAL HOUSEHOLD ACCOUNTS. 

Prepare an Original Household Record on the same plan as 
the Original Farm Record. The totals should conform approxi- 
mately with one of the months in the Household Summary. 

Hand in your work for approval . 

LESSON 17. 
ORIGINAL BALANCE SHEET. 

Prepare a Balance Sheet of the work done in the two pre- 
ceding lessons, exactly like the one you prepared last, and hand 
in for approval. 

(65) 



66 THE BUSINESS SIDE OF FARMING 

LESSON 18. 
ORIGINAL SHOP ACCOUNTS. 

• Farm and Shop bookkeeping do not differ in principle. They 
differ only in titles of accounts. The books used are the same 
as in the farm accounts, except special records adapted for 
the needs of the shop. The Labor Record need not differ at 
all. Taking the Cash Book furnished in your set, note that the 
number of columns and the arrangement is exactly the same 
as in the farm accounts. Only the titles of the columns are 
different. The titles given below are self-explanatory, except 
the Merchandise and the Supply Column. A large number of 
shops and mills carry a small stock of merchandise which is 
sold at retail. Where this is done, it is preferable to keep it 
strictly separate from the manufacturing end of the business. 
The shop should buy from the store at regular prices, and 
charge it with any supplies furnished for sale. Where it is 
found impracticable to keep a separate set of books, a column 
is provided for receipts from merchandise sold and one for 
payments for merchandise purchased. Taking into account 
the inventories at the beginning and end of the year, these 
columns give the result of this branch of the business. In the 
Supplies Column is entered only consumable material used in 
the process of manufacture, such as oil, cotton waste, sand- 
paper, files, and the like. The Sundries Column is used for all 
items which do not fall under any special column. For in- 
stance, if interest is paid on a note, it is entered in the total 
payments column and also in the Sundries Column, and under 
"Charge to" would be entered "Interest." It is frequently 
necessary to show hospitality in closing deals in which a shop 
of any consequence is interested. Such entertainment ex- 
penses would be entered in the Incidental Column. 

Direi tions: 

1. Head all the columns in the Cash Book as follows: 
Under Receipts : Merchandise, Manufacturing. Under Pay- 
ments: Hardware, Lumber, Supplies, (Machinery and Tools), 
Repairs, (Buildings and Improvements), Labor, (Freight and 
Express), Office, (Light, Fuel and Power), Merchandise. 

2. Prepare an imaginary inventory of a planing mill, with 
$10,000.00 capital, having a merchandise inventory of $2,000.00 
consisting of house-fittings, light hardware, etc. Use the form 
illustrated on page 17. 

3. Write up an imaginary month's business of receipts and 
payments, taking care that there be at least two entries illus- 
trating each column. Follow the plan illustrated on page 22. 

4. From the above figures, prepare a probable estimate of 
the years business. 

5. Prepare a Balance Sheet similar to the one shown on 
page 36. 6. Hand in your work for approval. 



FARM RECORDS 67 

LESSON 19. 
ORIGINAL HORTICULTURAL SET. 

The remarks in Lesson 18 regarding the relation between 
Farm and Shop accounts hold true also for Farm and Horti- 
cultural accounts. 
Directions. 

1. The Farm Cash Book may be used with the same titles, 
except under Grain, write Apples, under Hay, write Peaches. 
We will assume that enough animals are kept on the farm 
to warrant keeping accounts of the stock, dairy and poultry. 
The payments columns can be exactly the same. 

2. Prepare an imaginary inventory of about $5,000.00 net 
capital. 

3. Prepare an imaginary month's business, same as in the 
preceding lesson. 

4. Prepare an estimate of the year's business. 

5. Prepare a Balance Sheet. 

6. Hand in work for approval with" suggestions and critic- 
isms. 

LESSON 20. 
PERSONAL ACCOUNTS. 

The student will find it a valuable exercise to keep account 
of his personal expenditures in the Cash Book provided in the 
supplies. The columns may be headed as follows : Receipts : 
Earnings, From Home. Payments: Fees, (Books and Station- 
ery) , Board, Room, Clothing, Recreation. This will not be 
required of all students, but a semester's record of the student's 
actual expenses will be accepted instead of any original set. 
Whether submitted for credit or not, all students are urged to 
keep an accurate record of their personal expenses. 

LESSON 21. 
PREPARATION OF SPECIAL RECORDS. 

Directions. 

1. Procure about two dozen sheets of good quality, unruled 
papier (or use blank filler in the note book) . a .id cut it 8 1-2x11 
inches. 

2. Lay out in lead pencil the special records illustrated on 
pages 46 to 49, putting only one record on a page. Sharpen 
your pencil to a fine point. The width of the column should be 
planned on a strip of paper before the work is begun. Rule 
lightly, so as to be able to make corrections readily. 

3. Submit the work to your teacher for approval before 
inking. 



68 THE BUSINESS SIDE OF FARMING 

4. Ink the approved work and fill in the proper headings. 
The horizontal lines are not to be inked except the heading 
lines. 

5. Hand in work for final approval. 

LESSON 2 2. 
COST RECORDS OF STOCK. 

According to either the second or third method outlined on 
page 41 , prepare a statement of the net profit or loss of not less 
than five milch cows. Your information may be drawn from 
any farm, from the College Department of Dairying, or from 
Agricultural Bulletins. The records required are : Labor, Milk, 
Feed Record, and the Individual Ledger account of each ani- 
mal. Two months will be allowed for this work. Rule your 
records as explained in Lesson 21. 

Hand in your work with a letter of explanation of the system. 

LESSON 2 3. 
COST RECORDS OF CROPS. 

In a similar manner, prepare Cost Record, showing the net 
profit or loss of two crops, from information secured from 
reliable sources. Any local crop may be taken, such as pota- 
toes, wheat, oats, hay, etc. Two months will be allowed for 
the work. 

Hand in your work with a letter of explanation of the sys- 
tem. 

LESSON 2 4. 
THE INVESTMENT. 

The Census for 1900 gives the following apportionment for 
land and improvements, buildings, implements, machinery, and 
live stock for every $10,000.00 invested : 



Division — 

,N. Atlantic 
States . . . 
S. Atlantic 
States . . . 
N. Central 
States . . . 
S. Central 
States . . . 
Western 
States . . . 

Total . . 

Average . 



Total. 

$10,000 
10,000 
10,000 
10,000 
10,000 



Land 
and Impr, 

$5,737 

6,661 

6,055 

4,114 

4,463 



Imp. 

Buildings, and Mach. Live St. 

$2,567 $606 $1,090 

2,720 332 1,362 

825 500 2,620 

1,114 373 4,356 

693 593 4,251 



$50,000 $27,030 $7,919 $2,404 $13,679 



$10,000 $5,406 $1,584 $481 $2,736 



FARM RECORDS 69 

Secure at least five inventories from your farmer friends 
and prepare a statement similar to the above table. Prepare 
a condensed report to be presented to the class when called for, 
giving the source of your information, if required. 

Hand in your work for approval. 

LESSON 2 5. 
THE FARM PLOT. 

Draw to scale any farm with which you are acquainted. Lay 
out the various fields and mark the crop and acreage as shown 
on page 49 . Draw it first in lead pencil, then in ink. 

Hand in the work for approval. 

LESSON 2 6. 
AGRICULTURAL STATISTICS. 

It is desired to obtain accurate data on Farm Management, 
and you are required to write to ten farmer friends for cer- 
tain information. Copies of a letter will be furnished by your 
teacher. (A copy of the proposed letter will be furnished any 
teacher by the author.) Tabulate the result and prepare a re- 
port to be discussed by the class. 

LESSON 27. 
REVIEW QUESTIONS. 

Write the following questions and their answers on paper 
8 1-2x11 inches and submit to your teacher for approval : 

1 . What is the object of keeping books? ' 

2. What is the use of the Day Book? Prepare a specimen 
day book page of at least five entries. 

3. What entries are properly made in the day book? 

4. Describe the Bill and Receipt File and explain its use. 

5. How is an inventory taken? Of what does it consist? 

6. What are Resources? Liabilities? Profits? Losses? 

7. What are Accounts Receivable? Accounts Payable? 

8. Prepare a specimen Account Receivable and also a speci- 
men Account Payable. 

9. What should determine the time of the year when the 
farm Balance Sheet is taken? 

10. What are the disadvantages of Single Entry? 

11. Prepare a specimen of each of the Special Records sug- 
gested on pages 46 to 49. 

12. Which is the principal book in the second method? 
(Double Entry.) 

13 . What is the value of the special column provided in the 
Journal? Suggest columns that might be added. 

14. How is each side of the Cash Book balanced? 

15. How do you find the cash on hand? 

16. If a bank account is kept, how do you find the cash on 
hand ? 



70 THE BUSINESS SIDE ()F FARMING 

17. Describe how household accounts are kept. 

18. What allowance for household besides cash? Why are 
these allowances both debited and credited at the time 
they are entered? How are these allowances entered in 
the General Cash Book? 

19. How is the cash on hand found in the household ac- 
count? 

20. Describe how the Sundry Columns are itemized. 

21. Of what three principal headings does the Financial 
Statement consist? 

22. State the steps necessary in preparing the Financial 
Statement. 

23 . State some of the advantages of banking. 

24. What is meant by depreciation? What are the rates 
commonly used? 

25. How may land be said to depreciate in value? 

26. Describe three methods of finding the profit, or loss, 
from live stock. From different crops. 

27 . What is the principal difference between farm and shop 
accounts? 

28. How may a large crop prove to be a loss to the com- 
munity? 

29. Write a paragraph, pointing out the importance of 
records for the farmer. 

30. Write a paragraph of general review of the system of 
bookkeeping you have now finished, and point out its 
merits and defects. 

31 . In finding the actual net gain or loss on accounts of 
production, what corrections must be made? 

32 . Give the rule for finding the profit or loss in the Balance 
Sheet. 

33. What is the distinction between equipment and sup- 
plies? 

34. What is the distinction between improvements and re- 
pairs? 



i:iiii.i(Mii;.\i'in 



Farm Management F. W. Cord 

The Modern Farmer E. F. Adams 

The Farmer's Business Handbook Isaac P. Roberts 

Agricultural Economics Henry C. Taylor 

The Business of Dairying C. B. Lane 

Farm Accounts J. A. Vye 

Bulletin No. 97 University of Minnesota 

Bulletin No. 48 Bureau of Statistics, Dept. of Agriculture 



INDEX 



Accounts, 

Valueof. 9 

Farm 22 

Horticultural 67 

Household 30 

Personal 18 

Shop 66 

Agriculture, statistics of 69 

Balance Sheet, 35; illustrated 36 

Bank Account, explained 26 

Bibliography 70 

Bill and Receipt File, 

Explained, 11; illustrated 13 

Blank Books 5 

Bookkeeping, 

Difficulties of Farm 9 

Objects and Methods of 9 

Cash Book, 

Explained 24 

Illustrated 22, 23 

Cost of Production 40 

Of Crops 42 

Of Livestock 41 

Dairy Herd, Test of 41 

Day Book, explained 11, illustrat. 12 

Depreciation 14 

Double Entry 21 

Books Needed 24 

Compared with single 24 

Superiority of 21 

Equipment 25 

Exchange Phase, importance of ... 8 

Farming, a paying business 8 

History of the Farm 11 

Household Accounts 30, 32 

Improvements 25 



Introductory 7 

Inventory, 

Explained 14 

Illustrated 15 

Continued 20 

Investment 68 

Labor, Records 46 

Ledger 26 

Live Stock, cost of production 41 

Methods of Bookkeeping 9 

Milk Records 44 

Office Methods 45 

Personal Accounts 18, 19 

Phases of Farming 8 

Plot, the Farm 49 

Poultry Records 44 

Practice Work, 

Double Entry 55 

Original 65 

Single Entry 50 

Profits, How to Determine 14 

Profit and Loss Statement 17 

Prosperity of the Farmer 7 

Questions, Review 69 

Rates of Depreciation 14 

Records, what they should show... 9 

Sales Book, duplicating 44 

Shop Accounts 66 

Single Entry 11 

Special Records 44 

Statement for Publication 37 

Success, Causes of. 7 

Supplies 25 

Trial Balance, 

Explained 26 

Illustrated 31 



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LIBRARY OF CONGRESS 









